Transportation Problem

By
Dr. ATHAR HUSSAIN ANSARI
KIMDS

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 Description

A transportation problem basically deals with the

problem, which aims to find the best way to fulfill
the demand of n demand points using the
capacities of m supply points. While trying to find
the best way, generally a variable cost of shipping
the product from one supply point to a demand
point or a similar constraint should be taken into
consideration.
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 Transportation tableau

A transportation problem is specified by the

supply, the demand, and the transportation
costs. So the relevant data can be summarized
in a transportation tableau. The transportation
tableau implicitly expresses the supply and
demand constraints and the shipping cost
between each demand and supply point.

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 Formulating Transportation Problems

Example 1: Power Co. has three electric power

plants that supply the electric needs of four cities.
•The associated supply of each plant and demand
of each city is given in the table 1.
•The cost of sending 1 million kwh of electricity
from a plant to a city depends on the distance the
electricity must travel.

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 Table 1. Shipping costs (in Rs. 000), Supply, and
Demand for Power com. Example

From To
City 1 City 2 City 3 City 4 Supply
(Million kwh)
Plant 1 8 6 10 9 35
Plant 2 9 12 13 7 50
Plant 3 14 9 16 5 40
Demand 45 20 30 30 125
(Million kwh)
Transportation
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 Solution

1. Decision Variable:
Since we have to determine how much electricity is
sent from each plant to each city;

xij = Amount of electricity produced at plant i and

sent to city j

x14 = Amount of electricity produced at plant 1 and

sent to city 4

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 Objective function

Since we want to minimize the total cost of shipping

from plants to cities;

Minimize Z = 8x11+6x12+10x13+9x14
+9x21+12x22+13x23+7x24
+14x31+9x32+16x33+5x34

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 Supply Constraints

Since each supply point has a limited production

capacity;

x11+x12+x13+x14 < 35
x21+x22+x23+x24 < 50
x31+x32+x33+x34 < 40

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 Demand Constraints

Since each supply point has a limited production

capacity;

X11+X21+X31 > 45
X12+X22+X32 > 20
X13+X23+X33 > 30
X14+X24+X34 > 30

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 Sign Constraints

Since a negative amount of electricity can not be

shipped all xij’s must be non negative;

xij > 0 (i= 1,2,3; j= 1,2,3,4)

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 LP Formulation of Powerco’s Problem
Minimize Z = 8x11+6x12+10x13+9x14+9x21+12x22+13x23+7x24
+14x31+9x32+16x33+5x34

S.T.: x11+x12+x13+x14 < 35 (Supply Constraints)

x21+x22+x23+x24 < 50
x31+x32+x33+x34 < 40
x11+x21+x31 > 45 (Demand Constraints)
x12+x22+x32 > 20
x13+x23+x33 > 30
x14+x24+x34 > 30
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xij > 0 (i= 1,2,3; j=. 1,2,3,4)
 General Description of a Transportation Problem

1. A set of m supply points from which a good is

shipped. Supply point i can supply at most ai
units.
2. A set of n demand points to which the good is
shipped. Demand point j must receive at least bi
units of the shipped good.
3. Each unit produced at supply point i and shipped
to demand point j incurs a variable cost of cij.

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 xij = number of units shipped from supply point i to
demand point j
m n
Minimize   cij xij
i 1 j 1
n
Subject to  xij  ai i  1,2,.., m
j 1
m
 xij  bj j  1,2,.., n
i 1
xij  0 ; i  1,2,.., m, j  1,2,.., n

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 Balanced Transportation Problem

If Total supply equals to total demand, the

problem is said to be a balanced
transportation problem:

i m j n
 ai   b j
i 1 j 1

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 Balancing a TP if total supply exceeds total
demand

If total supply exceeds total demand, we can

balance the problem by adding dummy
demand point. Since shipments to the dummy
demand point are not real, they are assigned a
cost of zero.

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 Balancing a transportation problem if total
supply is less than total demand

If a transportation problem has a total supply that is

strictly less than total demand the problem has no
feasible solution. There is no doubt that in such a
case one or more of the demand will be left unmet.
Generally in such situations a penalty cost is often
associated with unmet demand and as one can
guess this time the total penalty cost is desired to
be minimum.
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 Finding Basic Feasible Solution for TP

Unlike other Linear Programming problems, a

balanced TP with m supply points and n
demand points is easier to solve, although it has
m + n equality constraints. The reason for that
is, if a set of decision variables (xij’s) satisfy all

but one constraint, the values for xij’s will satisfy

that remaining constraint automatically.

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 Methods to find the bfs for a balanced TP

There are three basic methods:

1. Northwest Corner Method

2. Minimum Cost Method

3. Vogel’s Method

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 1. Northwest Corner Method
To find the bfs by the NWC method:

Begin in the upper left (northwest) corner of the

transportation tableau and set x11 as large as

possible (here the limitations for setting x11 to a

larger number, will be the demand of demand
point D1 and the supply of supply point S1. Your

x11 value can not be greater than minimum of

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the available supply
. or required demand.
 North West Corner Method
Step1: Start with the North West corner of the transportation
matrix and allocate as much as possible equal to the
minimum of the rim values for the first row and first
column.
Step2(a): If allocation made in step 1 is equal to the supply
available at first source then move vertically down to the
column and apply step1 again for next allocation.
Step2(b): If allocation made in step1 is equal to the demand
of first destination then move horizontally to the cell and
apply step1 again for next allocation
Step2(c): If a1=b1 allocate x11 and move diagonally to next
cell
Step3: Continue the procedure step by step till an allocation
is made south east corner cell of the transportation table.
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 2. Least Cost Method
The Northwest Corner Method dos not utilize shipping
costs. It can yield an initial bfs easily but the total
shipping cost may be very high. The minimum cost
method uses shipping costs in order come up with a
bfs that has a lower cost. To begin the minimum cost
method, first we find the decision variable with the
smallest shipping cost (xij). Then assign xij its largest

possible value, which is the minimum of Si and Dj

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 After that, as in the Northwest Corner Method we
should cross out row i and column j and reduce the
supply or demand of the noncrossed-out row or
column by the value of xij. Then we will choose the
cell with the minimum cost of shipping from the
cells that do not lie in a crossed-out row or column
and we will repeat the procedure.

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 Least Cost Method

Step1: Select the cell with the lowest unit cost in the entire
transportation table and allocate as much as possible to
this cell and eliminate that row or column in which either
supply or demand is exhausted. If both row and column
are satisfied simultaneously only one may be crossed out.
In case the smallest unit cost cell is not unique, then select
the cell where maximum allocation can be made.
Step2: After adjusting the supply and demand for all
uncrossed out rows and columns of the transportation
table and allocate as much as possible to this cell and
eliminate that row or column in which either supply or
demand is exhausted.
Step3: Repeat the procedure until the entire available supply
and demand is satisfied.
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 This method allocates as much as possible to the least-
cost cell. Ties may be broken arbitrarily. Rows and
columns that have been completely allocated are not
considered, and the process of allocation is continued.
The procedure is completed when all row and column
requirements are addressed.

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 3. Vogel’s Method
Begin with computing each row and column a penalty.
The penalty will be equal to the difference between the
two smallest shipping costs in the row or column.
Identify the row or column with the largest penalty.
Find the first basic variable which has the smallest
shipping cost in that row or column. Then assign the
highest possible value to that variable, and cross-out the
row or column as in the previous methods. Compute
45 new penalties and use .the same procedure.
 Vogel’s Approximation Method
Step1: Calculate penalties for each row (column) by taking
the difference between the smallest and next smallest unit
transportation cost in the same row (column). This
difference indicates the penalty or extra cost which has to
be paid if one fails to allocate to the cell with the
minimum unit transportation cost.
Step2: Select the row (column) with the largest penalty and
allocate as much as possible in the cell having the least
cost in the selected row (column) satisfying the supply
and demand conditions. If there is a tie in the value of
penalties, it can be broken by selecting the cell where
maximum allocation can be made.

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 Step3: Adjust the supply and demand and crossed out the
satisfied row (column). If row and column are satisfied
simultaneously, only one of them is crossed out and the
remaining row/column is assigned a zero supply/demand.
Any row/column with zero supply or demand should not
be used in computing future penalties.
Step4: Repeat Step1 to Step3 until the entire available
supply and demand are supply.

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